Gazumping returns to housing market
According to property experts Hometrack, the number of homes on offer has fallen by 1.6% in the past month, while the number of property buyers registering with estate agents has increased by 2%.
In the resulting seller’s market, this has led to an increase in gazumping, (where a seller agrees a price with one buyer but subsequently accepts a higher offer from a third party) and sealed bids, where aspiring buyers are asked to submit their best offers and the seller selects the highest.
Hometrack said that the average buyer is now paying 95.2% of the property’s asking price, second only to the peak of 95.7% seen in 2007 at the height of the property boom. Nationally, property prices have risen by 0.5% in the past month, 0.7% in the South East and 0.8% in Greater London. Prices increased by 0.1% in the East Midlands and the North West, by 0.2% in Wales and Yorkshire and Humberside, and by 0.3% in East Anglia and the West Midlands, by 0.4% in the South West.
Demand from prospective buyers in the capital grew by 6% month-on-month, helping to maintain the upward pressure on prices. Property in London is taking just over four weeks on average to sell, with continued demand from cash buyers from overseas, compared with slightly more than eight weeks across England and Wales.
Sellers in the capital are typically achieving 97.2% of their asking price.
Richard Donnell, director of research at Hometrack, said that a ‘chronic lack of supply’ has been driving house price growth.
He said: ‘Growth in new sales being agreed is running at 4-5% per month and this is continually eroding the stock of homes for sale.
“In contrast, levels of demand have grown by 3% in the last two months. Improving confidence amongst buyers has been fuelled by low mortgage rates and positive news on a recovering housing market.”